Reference no: EM132887094 , Length: word count:2100

BULAW 3731 Income Taxation Law & Practice - Federation University

Assignment - Part A

You are required to read the Facts section below and answer the 4 questions in Part A. Each question in the Required section for Part A will be marked out of 15

In Part A you will be marked in accordance with the Assignment Criteria. When answering each question in the Required section below, you must:
• identify and discuss legislation, case law, ATO rulings and determinations where relevant; and
• advise of the correct legal position; and
• give reasons
For assessment purposes these criteria are equally weighted.

Facts

Cas Silk lives and works in Brisbane as a fitness consultant. She is employed by the French company Puissance Ltd and is paid a monthly salary of $8,000 which is usually deposited into Cas' bank account in Australia on the first day of each month. Cas commenced her employment with Puissance in January 2017.

In March 2018 Puissance Ltd successfully tendered for the contract to design and instal Olympic standard gym equipment for the Japanese company Fitu Ltd. Cas had always wanted to visit Japan and was excited when Puissance selected her to oversee the installation of the equipment.

Cas travelled to Japan on 1st April 2018 and the installation of the equipment was expected to take a month. Unfortunately, due to poor design, the connections on the gym equipment were not compatible with the Japanese power supply outlets. Cas' planned one month stay became four months as she worked to finalise the safe installation of the equipment.

In late April 2018 Puissance Ltd instructed Cas to open an account with a bank in Japan. On 1st May, 1st June and 1st July Puissance Ltd deposited Cas' monthly salary into her Japanese bank account.

While Fitu Ltd was dissatisfied with Puissance Ltd's performance of the contract it was very impressed by Cas' professionalism. At the end of July 2018 Fitu presented Cas with two airline tickets and travel vouchers for a holiday in New York, valued at $8,000.

In addition, Fitu offered Cas a consultancy job for 3 years, with a salary of $100,000 per annum and a car. Cas was also offered an amount of $40,000, to be paid in two equal instalments, as an incentive to join Fitu and to compensate for the cost of moving to Japan permanently. The first instalment of the $40,000 would be paid when Cas joined Fitu and the second instalment after one year of service.

Cas accepted the offers by Fitu on 1st September 2018.

Required

1. Advise Cas of her Australian tax residency status for the financial years 2017/2018 and 2018/2019.
2. Advise Cas of the tax treatment of the non-monetary benefits she received at the end of July 2018, and the car. (How would these be characterised according to Australian tax law and what implications does this have for Cas?)
3. Advise Cas about the accessibility in Australia of the amounts she received during the financial years 2017/2018 and 2018/2019.
4. Is Cas an Australian resident for the financial year 2019/20, and which, if any, of the amounts she received that year would be accessible in Australia?

Assignment - Part B
You will receive a mark out of 40 for Part B.
In Part B you will be marked in accordance with the Assignment Criteria. In your responses to the Required section below, you must:
• attempt all parts of the question, with reasonable balance
• demonstrate your understanding of the Australian tax system in your discussion of hypothecation
• give appropriate examples
• give reasons
• demonstrate your understanding of at least two characteristics of a good tax system
• demonstrate your awareness of appropriate taxation law resources through your choice and use of such resources (for example, using a peer reviewed publication or the ATO website rather than Wikipedia)
• referencing - correct and accurate as to style
• presentation, including proof reading

For assessment purposes these criteria are equally weighted.

Topic
The final report of the Royal Commission into Aged Care Quality and Safety was recently released. One of many findings was to increase funding for aged care services. Both Commissioners supported consideration of introducing an aged care levy as a way of increasing funding, however, they had differing views on whether this should be hypothecated.

Required:
Assume a decision is made that the Australian government will provide increased funding for aged care services; and answer the following:
• What is meant by ‘hypothecated'? Give Australian examples of both hypothecated and non-hypothecated taxes in your response.
• Do you think it would be a good idea for the government to increase aged care funding through hypothecating a part of its tax revenue to fund aged care services? Why or why not? Refer to and evaluate at least two characteristics of a good tax system in your response.

Attachment:- Income Taxation Law.rar